AJG - Earnings call transcript Q4 2024 | Arthur J. Gallagher & Co.

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Operator

Good afternoon, and welcome to Arthur J. Gallagher & Company's Fourth Quarter 2021 Earnings Conference Call. [Operator Instructions] Today's call is being recorded. [Operator Instructions].

Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements within the meaning of the securities laws. assume on to this not forward-looking information does provided statements call. company any update obligation or The These forward-looking statements that could are subject to actual to risks results differ materially. cause and uncertainties and the concerning the to most XX-Q details for XX-K, X-K recent sections and on refer Please such company's forward-looking statements risks contained Risk information in filings more and Factors uncertainties.

begin. to and information non-GAAP Chairman J. Gallagher call Arthur as In materials this Company. regarding measures, Investor addition, of on these may for Relations release pleasure Gallagher, of measures the is reconciliations discussed introduce the please in Gallagher, the company's Jr., Mr. refer of J. Patrick CEO other now as other earnings to the section and well my website. It you

J. Gallagher

and Thank for quarter Good you fourth our very joining earnings for much. call. 'XX afternoon, thank us you

Howell, On CFO, the of is our our operating team other members the today and call the management heads for divisions. Doug of

to results, to Before my get like California. I tragic our comments financial wildfires in I'd acknowledge about the

Our including our heartfelt own those impacted, all colleagues. Gallagher are with thoughts

responsibility, and and an Gallagher And many the occasion. the before, industry such rise businesses and will families, their to important industry has like times communities role lives. and company restore and Our rebuild helping

our Onto quarter. had financial comments Okay. my an regarding we performance, excellent fourth

quarter for noise Doug impact close our peel these out terrific year-over-year. earnings team. by up adjusted headline segments numbers AssuredPartners GAAP fantastic EBITDAC adjusted EBITDAC basis points combined X% XX.X%, XXX organic comments. creates growth, XX% share revenue posted the another to earnings our per net some our Risk XX% margin of per $X.XX, and quarter of Management of in margin XX% Brokerage of double-digit of of XXth The up back and we growth, his For and growth another raise December capital acquisition of year-over-year. year consecutive XX.X%, Regardless, in the in that revenue, will growth earnings adjusted reported $X.XX share

X.X%. and basis Moving to our to revenue starting contingents. income XXX which by margin were to commission Base X.X%, was basis, Brokerage points results offset which expectations, growth in includes bit with XX%. a segment. with funds raised AssuredPartners. on the EBITDAC fees Adjusted a segment lower slightly expanded the XX.X%, Reported was interest got growth acquisition Organic for line related of

income, interest net was Excluding expansion basis XXX points. margin

Australia behind Let our With Brokerage the all organic. X% PC of me Zealand in were around was U.S. delivered our by and organ single we down insights high contingents. U.K., Canada some impacted a was retail retail and segment give organic X% overall. couple operations, New The digits. lower percent,

to Our and XX%, 'XX. Shifting which our global overcame a some posted reinsurance in benefit in of finish that the aerospace that large business business. shifted total the market of sales specialty from about expected global and of earlier brokerage businesses in organic includes catch-up strong case consulting headwinds really live wholesale organic employee our X%,

whether very retail, wholesale reinsurance. growth, or strong So

lines auto. general up property market up continues premium and up far flat; increases Thus starting following: the casualty X%; line, up we changes market. ticking fourth global the insurance past Breaking workers' XX%; in umbrella grow. and in fourth product down higher January, premium with consistent by X%; the lines professional me are lines by P/C driven like renewal to commercial fourth some auto liability up let X%, comp increases, thoughts X%; the above commercial were that's umbrella quarter pricing quarter and renewal X%. and the increases personal X Next, about saw with global and on renewal primary exposure than both are insurance With premium quarters. quarter insurance Overall, rate environment combined, P/C provide slightly

many due cost terms 'XX did being attachment Growing $XXX greater expose discipline casualty, resulted there was budget behaving while on reinsurers Remember, rationally cat price and a coverage buyers to find their expertise. coverage, at our renewals for we data is reinsurance great best help pricing to points are to buy than see to sufficient an were in natural job saw limit more further remains reflected reinsurance reserve the and to frequency. mitigating increases market. while potential to price increases from of an an U.S. more elevated not to conditions. Shifting of declines continue to revert underwriting our Overall, same spend. Shifting in for of more it's price modest enables favored lower that that in can on needed catastrophe capacity This was orderly where So X/X us we renewals property but the demand customers, and Reinsurance them to top XXXX lines despite exercise capacity, ourselves increases. with most across and coverages year or deficiencies. billion continued resulting no again, environment them tools, terms specialty to operate fits and for generate with declines cat-exposed losses. as for similar estimated their differentiate profit. It's elevated January cover property, that buyers. that the which securing successful and towers. lean clients to of geographies. adequate brokers casualty reinsurers pushing insured cautious trends Carriers market becoming loss our softening We're generally property the across greater risks And especially coverage met more reinsurance because and reinsurance reduce in were acceptable reinsurance lines property end to deductibles with

and environment. stories this with market. and should of had excel new reserve increases here a seem be fantastic Regardless, in will and the tell Re losses nice the wildfire X/X January, time forward, to Gallagher these casualty to business Looking impacts some each ultimately continue how in wins

activity. business customers' our on comments some to Moving

and for full indications true is The fourth XXXX. our positive daily year the cancellations endorsements territory. quarter, in During same from net audits, revenue remained

activity to 'XX. not adjustments the are high the as is While as year year very revenue full past upward quite 'XX, this close

and see client solid no of business economic activity meaningful global to continue a we So slowdown. signs

Within above of headwinds And helping XX% is we the the of to costs. open number and expertise, Employers are share Since control match relatively base competing time, take their number and offerings. wage level grow niche remained that their the increases our well the work. looking for steady time, April still well strong. jobs has medical looking business. are and remains market both inflation, 'XX, I positioned we our of that labor brokerage data a same analytics ways U.S., the continued the against for local Remember, to workforce broker at believe service and to or at our are extensive cost are that are people benefit the conditions, of market smaller professionals outstanding navigate. Regardless cannot across unemployed

with business premium in net strong and some U.S. So labor market market. nice a production momentum still brokerage seeing our across mid-single-digit new P/C business, growth is a

We X% 'XX segment see year range. continue full the to Brokerage organic to in X%

expectations. in claim X%, our and 'XX, Revenue benefit to EBITDAC excellent line X%. to growth margin was should Adjusted counts. Heading including we with Risk activity of retention, on rising organic from our in Management continue was increases Gallagher client into segment, our Bassett. business October XX.X%, customers' Moving

to to range X% we and in that and full organic XX.X%. Shifting acquisitions. X% year Looking still see mergers around ahead, margins XX%

During new at representing estimated the revenue, million fourth year $XXX prices, bringing fair completed around quarter, we of full XX mergers to annualized $XXX the tuck-in million.

was practice the welcome $X.X and M&A analytics, Gallagher to an revenue. and focus, allowing clients. like acquire signing opportunities partners specialty also further us, our to leverage very For extend commercial deepen family big with I'd to those our reach And Gallagher. opportunity professionals. and of warm a should our joining upon the in billion new more to our December of even us and compelling forma groups more a create expand build annual AssuredPartners revenue pro agreement It tuck-in course, value niche to It's across news middle-market provide retail of to data

and sales-based cultures. the highly What especially combination X involves exciting is innovative, is that entrepreneurial

X Assured to and We have we in here discussions the professionalism sometime will until quarter. will the first talent, complete operate approvals close, necessary companies receive we continue are and independent colleagues. with Although the acquisition anticipate and the as of very impressed started we excitement

signed to around $XXX we addition our representing These way completed be terrific they the in being revenue, million me as close true XX% a in And growth we are acquire excellent culture acquisition, adjusted growth it of year, would to in performance estimated more financial if AssuredPartners million for pending performance the agreement financial of with about In a Management have EBITDAC. to of X.X% terrific partner revenue. proud this mergers firms revenue. metrics. year $XXX annualized prepared, of signed or Gallagher. With XX continue and growth, full the organic always year, XX definitive nearly has combined, with Good sheets AssuredPartners. choice, strong annualized Brokerage Risk the on as and I'm our term expand. we as reflect chose stayed and let a am I to proud XX% have

rock by with that solid around our guided clients, globe. on carriers, is and Frankly, is whether our the form have, merger colleagues unstoppable partners Way every the interaction the Our Gallagher we our or Way. Gallagher and foundation about culture future they Gallagher colleagues, is it's the based culture

over it turn Doug. to and now Doug? stop I'll Okay.

Douglas Howell

results Pat, thoughts capital the usual remarks hello, Pat XXXX, cash, my quickly the unpack M&A impact time on Then during some of replay and sound-bites which on management. with I'll then on, to the Thanks, quarter. most early use everyone. Today, recap AssuredPartners up our from and and our touched my activities financing I'll of comments the our on quarter of wrap just rest my prepared

growth trend And base contingents quarter, highlights quarter earnings fee X.X%, of we that see a a backwards bit X.X%. don't this that see our went Terrific by release. in Okay, organic any solid and mission of you'll supplemental as fourth our growth from means. while

As trillions service brokerage increase higher environment inflating in offerings and I Pat XXXX and both increase new look should favorable outpacing which rates our competitors, of and premiums costs, global cover retentions. needing we're sales to to that relayed growing still organic, with our and our a to business loss

said in believe Brokerage organic segment from that what growth sit So year October. still unchanged today, 'XX That's we full range. be should we X% X% to as our here in we

Page see for on little margins, Please noise As the Brokerage X earnings of footnote. the a release.

$XX in margin income earned nicely the point You'll our XXX points last XX range. have holding AssuredPartners. are our close over been was aided read interest That's year. margins October margin of we of expectation cash up basis that, to expansion Adjusting XXX for by basis that the above XX.X%, about to on million would

margin see expansion expansion. viewing to like around At organic -- are Looking X%. margin we've we and points we full have XX ahead year said starting we of maybe XXX We basis points X%, 'XX, X%, like could times at many of growth see still basis expansion perhaps before.

interest those course, impact to then day, impacted and will by read on our income those changes rolling maybe interest and of rates March ranges. can also see better have on we impact time, a But ranges a rolling our this don't on our M&A. where might we numbers. Assured impact By the either the into be fiduciary then having IR at Of of go significant assets

change how to margins about in really no we're XXXX. So thinking

Northeast Northeast million solid smaller a posting the all quarter, a for admittedly, bit quarter expectations, below X% couple of our Management, a revenues the of be October another -- just As lumpy. little construction can from organic, in that consulting stemming and Risk dollars

XX.X% adjusted with X% seeing was that full year our to then quarter expansion margin for -- And was also in 'XX range the with margins forward, looking in also organic in of expectations. again XX.X% around line we're X% the So October year.

'XX. great by both brokerage quarter have teams and for strong both outlook management a year full and risk our a So and

release the to the Turning table. shortcut Page earnings segment and Corporate X of

interest line, thought were are a we in than because much the we time. October For at bit not as our banking that just as we into forecast better line our

a of better look at expectation lines close exchange was million. our about actual M&A than expectations. acquisition corporate Then income, tax energy, clean Corporate to catch-up line when of partially was our for adjusted by to that which remeasurement segment, the unrealized the the you October were both due and noncash offset return $X For foreign to

CFO that release move to IR from we commentary earnings So website. posted document our let's the on our

information AssuredPartners take Please the any headers been throughout read statement. time overarching deal. has document an to footnotes updated understand First, what or this hasn't some or to for

that the we So let's provided Page were for our to in 'XX helpers to what move actual quarter X fairly modeling close board, across October. numbers fourth

of what impact look As a forecast. numbers provided AssuredPartners. for we these any Again, we include 'XX, first none of from

full impact It Page interest at year of to outlook raise. is 'XX. Corporate interest $X the only found the billion interest the segment for from is Turning Assured includes debt in first -- The in additional line. our look I banking X. expense

X of document to tax Page to the Looking commentary our credit CFO carryforwards.

M&A. As assumption of so income still over used of X, asset to does we've pay pinkish for million be that columns late billion the interest Then AssuredPartners late you would rollover right. to need the And that basis reminder, of closed in March again, make M&A. shield future down that ship of not on $X the down added income Page expected for Assured yesterday. a to also course, interest 'XX the for regulatory assuming March of on the we'll because cash That's see tax deferred segment fund right much table, that revenue revenues separate pick nice over table it those revenues, holding income for closing. few dependent income. a the assets financing X Management future you'll fiduciary about XX on over It section but This of that quarters. All because for billion the Risk sweetener for interest first a numbers of will we taxable to cuts coming is are to after from rollover you $X $XXX year-end, should Assured's about of approximately Assured, include include 'XX. further rolling years, table, with and AssuredPartners expect we're next close, the amortization us nor other revenues which, from also of through page, Then then When not below approvals. We just assuming investment the the a highly that Assured's the table. $X.X point a X estimated million taxes rate brokerage two M&A Page to get a to includes be each an save the includes years. Flipping move close, to

the quarter additional from fund we were X. of The issued page Page income mind, in EBITDAC, December see to of expense additional the This help acquisition. newly offering. there impact is interest AssuredPartners to billion you fourth keep incurred the cash and on by revenues, segment. X to on incremental Moving that new was the additional net 'XX on the financing just worth EPS $X we a the earnings then holding our debt. to was There interest the And shares outstanding items equity

for of numbers. nearly cause quarter, Also, on little that does call-out but it out the to in information of provides see the the our greenshoe on page first nets of right impact a raise of You'll the December January. it all early nothing, equity that noise our and shares outstanding in some the full because the box for This the AssuredPartners we issued in includes shares exercise quarter. fourth

this ease flip you that repeat December on if provided of a Page you'll X, reference. There's news is Assured the page of to no presentation in this Finally, we page. just what new for see

year-end, exercised Finally, we let's December was move $X.X on fund received billion the of used the $XX.X shoe. than to funding. and will capital AssuredPartners. billion cash, M&A Available hand approximately management $XX as which to Since more be at billion, cash another underwriters XXst green

strong So this our free considering flow. cash and expected

excellent M&A We of are pipeline in fund to an position opportunities. our

to could in fund maintaining up all in $X have nearly billion future jumps it solid while like $X.X then 'XX, we investment-grade 'XX, Here rating. a looking M&A, billion to it's

the to have in quarter and books. an excellent an excellent year So

to on we I that I year. had terrific have As a say pretty reflect 'XX,

unstoppable Brokerage Risk of That's points Those combined organic we the basis EBITDA said, importantly, Pat Management our and margin X.X%. our culture. what adjusted terrific posted most For growth numbers expansion Overall XX%. segments, and we revenue of are and reflects XX XX%, of grew

those to So you, comments. Back my Pat. are

J. Gallagher

to for Rob, Doug. it want open questions? you up Thanks, do

Operator

first the line [Operator of BMO Zaremski from with Markets. question Instructions] Our Mike comes Capital

Michael Zaremski

and to surrounding on cadence in call tougher Brokerage to called weaker comps. guess, out? specifically too, peers beginning No of your We there kind Two downwards know next X% growth for But I XQ. some anything seasonality of more of do change, question, guess like that the X%. focused overweight loud terms the segments. of both year, year, the or cadence I'm clear, reinsurance you'd organic in First year-over-year cause seasonality, I the out the in and maybe is could of pricing segment.

Douglas Howell

have but with changes buying there to start Let price reinsurance. reinsurance, that some is me let that customers more back me on end been go are of the -- our the

spend a So in business the spending, us we also. when his not terrific total you And a comments, said we're customers are for new look decrease. Pat really like at that seeing our had quarter

Going back reinsurance to stronger yes, the quarter. first your the question, of first is part typically in

the And and so first is have our a of on in first in And then and see a the Offsetting is little organic the benefits maybe health throughout of what amount it. the quarter develops better welfare a retail some substantial performing than quarter, rest you medical about that do of up that could for seasonality higher our we well. growth year. renew that bit mitigate year, the reinsurance

seems to be getting stronger is Our stronger. wholesale and

of programs the a are in see little quarter growth. doing our reinsurance But first Our and would seasonality well. yes, because organic you

Michael Zaremski

it. Got Okay.

if be reinsurance actually saying down. lower, you're pricing even it higher, is So could not

Okay...

Douglas Howell

have Day, chance we the that, a I'll again too. for seasonality should better of to our IR March then feel on have talk to a you

Michael Zaremski

through you're thinking close, I'm Awesome. Okay. the share if The on to comment. due is able post question investment income, last deal

able it it's you directly of -- how that offer of those that balances you that its kind fully of is working understanding paying I'm kind could a lot balance the of and is that purchasing might -- onto leverage assets. to correct, relationships income in the describing and to you're optimize kind of kind sheet? guys capital didn't pay fiduciary be getting my asset terms more -- to gain in insurance kind businesses that if carriers that line, direct between that's time Is fiduciary a of it was had So your works the what company of

Douglas Howell

Yes. Yes.

I ago the that think around did This from Your success years don't recollection be will back, be XX think exercise up we accounts, is invested. obviously And good go more world. bank you of our went the We that of accounts consolidating and mostly know, into I correct. if our will U.S. fiduciary I cash through in picking have when some

do we better opportunity So that as together metric. see that that be an on will

there their guessing, run yes, going that So should on be will together I'm be better rate, forward. versus

Michael Zaremski

is any is Doug, of -- process that just like years? takes is kind or X-year many that a

Douglas Howell

in listen, about -- XX I it shouldn't we months, Listen, talking anymore. be

So Hopefully, it I get ]. faster. done think [ we'd

Operator

Peters The line next question from is the Raymond of James. with Gregory

Charles Peters

I guess California. start with I'd like to

potential -- I'm on market operations. RPS, there's impact how some the it insured touch in that inside there's substantial any seeing. the you you're in your to give wholesale might loss if interested market, could the us of perspective if business Given the going

this can we be disaster of you talk that about perspectives that just unfold watch great. would If your as

J. Gallagher

get how claims. that of first claims We and in if of of a of Greg, knowledge they're us they to having the to have to Well, is clients you, make to file those how reached sure hold already this what out all, filing difficulty Pat. had thousands

of we're We number already. we today, I the are with but that helping presently clients exact our have forget claims hundreds tracking.

California. for incredibly you've unfold there, for of it's impact situation, player in a And touch that huge player keep think again, been then of that. but We're us not in going Luckily, We're people. in our lines terms us. to months. we've to to busy Angeles, stay a in number a with the of big able going Los a personal big I it's continue in to got

We any had that our have were evacuated. lose folks many We not homes. did some lost of our have don't their and have in -- folks instances, anybody at of

strong day-to-day out think terms right we'll place going much help than I to So more impact our of I But give to can't a activities our there. clients. well be in in how you now that it's

Charles Peters

switch then question I guess And Okay. my is follow-up gears. --

contingents. You mentioned your comments lower in the about

and Just we're and 'XX a the that it outlook. for the then your have think to suggests up And and I curious, on But contingents, go your you they given up. with some guidance industry, happened I give what color in should the be profitability seeing spend maybe us that on continues again. color would imagined supplementals minute could back

Douglas Howell

expect simply higher and bit the great Greg. we maybe the in we said, trend context, of for X/X maybe little A I thinking again. because see question, there a We Like is estimates what bounce than had just a ratio to carriers. contracts. Yes, hundreds we across back year. back -- said ended This up spread this I And what we're shortfall my right. $X it would in final is what October. out been is Thanks third of in comments. this the They're Frankly, million asking. put in in a you of to throughout as it anticipating about year loss to as isn't from coming it's it get

of it. then in that in a if cost up X/X another just about And ticking came bit great us is loss $X million so very here results. really contracts that and ratios just not probably are in with of little January really X might we the kind in had -- it Canada And programs

about X%, but a quarter. blip fourth combine in the So mentally, you annual at math and supplementals if I you contingents, -- it's even it that's on I I small think if with here, when do look think basis, the an what

in are some still forward. what wouldn't there's it's going supplementals year. a be and systemic contingents to But I terrific So that overread shift going

grow to So I numbers those expect the would considerably. blip over this year

Charles Peters

cross set? Is Doug. line a there business that broader a on Just sort answer, a of clarification specific that business of

Douglas Howell

there. right? mean anything I I wouldn't line, the say across It's

of We have these contracts. hundreds

first lot on maybe since or of this or year. and of in $XXX around the coming say, have week I have I way to January. been million I we guess So the the information right saying our only what of loss number, get throughout $X $X here of think another X million picks ratio pretty a -- would million good

Operator

the comes Andrew Kligerman of question TD next Our line with Securities. from

Andrew Kligerman

'XX, First around Management -- question to back had last is the year. that Risk for guiding But is, And and to for to still year think to Thinking X% organic guidance that now XX% to fabulous. now for for 'XX you're guided segment. X% as to it next your you growth X%, which this of quite is year, year? robust start kind isn't changing as I was what's last

Douglas Howell

think business, so in. that Here's the little we get can a I to contracts speak. is It some come more is bit that thing recall, pretty if hunting, large elephant you this

this got So 'XX. that into some I business think we've year, nice in pipeline coming new the

segment, Bassett Gallagher go so the grow of still Risk this then history think the Management mid-single like a we'll in periods that happening. large have back something you have and see couple they'll if And and nice we We of where contracts. digits, that, I like

storm programs government that claim deliver opportunity. we I And carriers the more, right, in to our as pretty better we not us as nice but a more payment business that -- of more a on bit because claims for proving and their hikes. outcomes nice it some use we're Australia. then actually do We're process chasers, can work Then carrier lumpy -- and to remember. liability. we general we little business. a left comp And of Some is get decides that have on some and down

Andrew Kligerman

another know, probably this right? find never you could you like year, So elephant

J. Gallagher

with to [indiscernible] every -- just product hard in impact filled There list always right. Yes, is They're is once while. our a elephants.

Andrew Kligerman

Got you that look with was for employees I you I center then of operations now. really this people through a in you your about kind have excellence it just it year, technology much? you it. right And about And that do XX,XXX transaction? Can you think where need curious making And don't is as steady? need India to such to out AssuredPartners the keep given add hire

J. Gallagher

the that And yet I the using more got and a growth efficient. of very as bit. we our to time, think going acquisition technology more Andrew. demand that at We're Well, in use structure. puts that both much group quite be lot same ends you've make that a And does they're our correct, organic technology growth

at so employees, additional us think at next that about you'll time thousands. And up year, this I XX,XXX see

Douglas Howell

Yes.

The there, value technologies all implementing because causes their other thing for is lose not -- us. us don't in growth, The to goes have the work start chain jobs. think this. opportunities it service work folks those into they that years anybody comes it brings work and some that's they're tell when it up that process And years are just move our technologies work AI to too, we they of on our AI about that working of those develop else. that They standardized. into -- replace to the already folks, when been higher It's head truthfully, it. remember, for as causes by you, gives got value standardization, centers, improvement. our is and It I a

in in in so some ability offer our of And a opinion, to juggernaut the really very my it's of best the terms world. service

J. Gallagher

And But it service makes the unless standardize you for standardize that it. a, you do at you b, service; better when clients. our better and automate you can't it,

that. brokers issue real Just insurance. claim error that free. We're There much to aren't X can them take certificates going million, pretty X any of million of

Andrew Kligerman

I see.

or is bottom it's still may you line employees, X,XXX the add scalable. but maybe So takeaway X,XXX

getting You're margins still better right from takeaway that. final the Is that

J. Gallagher

money. right you're Yes, the on

Douglas Howell

in like-for-like that me surprise years, X won't doubled It that we've in number.

Operator

Fargo. Wells Elyse line Next of from Greenspan with question is the

Elyse Greenspan

'XX. My first question is on the Brokerage for outlook

just confirm So to think is reinsurance we think, away last sense said And when the bit you you said businesses how where also you you X% I and want then Could is X. see us to not at Doug, the X% it. a in day, your would spoke I happen. a X% the little brokerage maybe had reinsurance, did that's in a which October, by even from give detail organically December still reaffirmed you X, 'XX you all to guide? trending a benefits X%, more see in I line you benefits provide,

Douglas Howell

confirming I yes, everything think, you've said.

Second a are of of those in all, I telling think you Pat script growing businesses how pretty job did now. his right good

are next those year at think good this for point. guesses I

Elyse Greenspan

Okay. in on I there also you bolt-on question. pipeline follow-up was did You end right? do the my fact That's guys highlighted deal, know quarter. -- very terms How announced is helpful. you the when number little there a see And you guys transactions, of good to And how of pipeline, pipelines. that the of overlap AP deals then the a

So expect, I closes, I once together. M&A level that point from at activity the the pick on quarterly of at end X QX, kind could from some just guess, up the of would of you bringing that bringing the deal firms -- guess, the

J. Gallagher

Pat. this answer So Elyse, that. is I'll

think, and And enterprises very, of little closed. the that AssuredPartners at good things at do been these there separately been they has -- much actually acquisitions. And bought. were that we when things that we overlap I very But till has as all, all. to there's tuck-in first our overlap operate making not to have between in know you continue put very to we on wanted -- saw we're announcement, we that the

got will bought of seen with So substantially fantastic. as the stuff. we've that's is done, deals. they've there increase the for And see of -- be and going due think like what the to we're diligence I great in what this their and getting pipeline view I that. doing pricing a they're And We're what number and not they've very us you think what overlap. to They've impressed team to accretive a doing we lot very,

small they're deals. good. in very tuck-in Now at about privately that good in. and very small bolt-ons we're firms They're many parts of They're the and the held of country not

Elyse Greenspan

And go ahead. sorry, then the X.X --

J. Gallagher

Sorry, ahead. go

Elyse Greenspan

without I that there from green Because was financing just say the the right? to wasn't going contemplated, it. shoe, billion right, the was $X.X

comments? you that his pipeline, was is that So have capital for just that Doug about talking cash in the extra the

Douglas Howell

Yes. That's right.

Operator

question Mark Our from is line Securities. next the Truist with Hughes of

Mark Hughes

any there the contribution first seasonality gave is there? Or for quarter you Doug, the Is the that AssuredPartners. guidance just the timing deal? from of

Douglas Howell

just we've the of deal. Right that's timing now, assumed the

benefit some be public have type to in skewed business will be they anything then might business -- entity July. seasonality, might that especially and will We their a

So it. a straight-line a is you'd see assumption little bit in there but of see seasonality, you pure what of

Mark Hughes

then, up And reinsurance wholesale in I you detail observations you the and on provide E&S gave market? the business, think, together, wholesale wholesale a Pat, on Any X%. can

J. Gallagher

take me a Let look, Mark.

Douglas Howell

I've I think specialty around look maybe Yes, -- U.K. at to think got X%. at our got that you've I

a the is for pretty in big You maybe look us. quarter just quarter. Re the It's at U.S. XX%. not specialty on small

you back there. X if get us at to that So those we maybe -- that numbers, look gets X% number

Operator

The next is David question from Motemaden ISI. of with line Evercore the

David Motemaden

I question Doug. had for a

the can organic unpack totally were the contingents? offset you it X%. for unpack guys came to entire and brokerage just much, was don't by was quarter, Just bit. looking I to and this and And you but the contingents I'm sales too life trying hoping a as just so Just that the want expected, nitpick little the differential wondering, back just

Douglas Howell

Yes, been kind you're X.X%, of with The running fees base that have business at and contingents that supplementals together. consistent right. commissioning

the of the up $X So difference the pretty base the put contingency. it somewhere in I'd range close to million, X% upper

spot you're you're there. right, observation in So on your

David Motemaden

Okay. I X% surprised RPC was given Great. just flat just -- price X%, property up the want follow on to up I then I quarter. And at the was versus last guess stayed

mix, dynamic up I'm from market anything the increased of buy like it's you if the as an guys property I'm So there's property here? wondering wondering are maybe but that as or if rate sort purchasing moderate else -- observing

Douglas Howell

that we've be always talked going coverages. certain that -- about opt coverages, up, rates some customers limits this of mean as been sometimes we've long and that time it's on I out a we drop it, might by or are said across they'll deductible Well, see raising reducing

So if rates are are as still are -- rates remember, -- rates increasing.

And everybody across are on for customers, the They realize ] from more carriers insurance. then seeing you're [ they're important in it's think they coverage still are to more that we're kind that board, the of reinsurance, that the buying more. And I rate-increasing buying buying the it. environment. a

So they'll opt in.

J. Gallagher

is value. Insurance pressure on to too. to Much deal, a more value ensuring big

David Motemaden

business basis, an growth running in. range. -- the said X% is underlying other a on X% X% just think brokerage Got sneak And just had one one X% 'XX underlying that you at Doug, in else but in it. the organic then call range one I maybe last to like to the is then to

that guess that guys of you to X% I'm X% get is sort what of wondering Like X% I So range? just of sort conservatism? would of scenario out sort

Douglas Howell

is year months, right year, what October it sitting we in next somewhere before. we're The that kind in said said X% guess, year. around that and felt lot mid-X% we've now Well out over range XX.X with next to of range it's way listen, that X% this that like consistent a think the looking and this back I I

like we'd So think stick with to that. we

extra think market We'll the see will still our you the better strengthening. estimates that. I wildfires will any always still than then is day working without the the don't digesting a on on is of news living expenses casualty see changing, pretty a reserve the team in been wildfire I we'll [ range, maybe taking you that. know for But somebody loss reserves hard what casualty up the how have know do. the be can't ] open the factored wildfires, I midpoint as do. obviously. We're cat And this. say

to So doing those take rates. cause what look will with at things really carriers hard they're a the

the versus about pretty look guess range is X% were within year. ago nice or a when isn't that we as in growth. excited for years being organic we pretty good And it X% X% So

Operator

Autonomous line Katie of is next question with Research. Sakys Our the from

Katie Sakys

thinking call. question about last my I guess first the is

components you about organic guide brokerage context Doug, the organic AssuredPartners each perhaps in mentioned between components that business come of to expect in the I growth and think, XXXX, rate brokerage acquisition? exposure. a to the growth changed new and you half had your the that of from quarter then on split perspective Has

Douglas Howell

had now. we're right still Pat that's seeing summarized No. happening quickly, pretty what it

Katie Sakys

Okay.

more kind the perhaps international organic looks about little what growth thinking And bit. like year then U.S.? looks abroad a retail like environment it growth good. the growth stable brokerage this Sounds are versus of continues for in bit a little to you guys How off cool

J. Gallagher

growing really it's nice by deep I incredibly that geography. are that mean Board Katie, a to did We incredibly meeting into world really the at our had enterprise, got part there. the I overall growth parts but a American of there's look think just Latin whole not well. dive business, of our just and huge you really, some of

extremely past Canada, slowdown about quarter. But of talked And to -- bit a why little depends. as that of a a definitely you give there's terms how on you in look We geographies it's have But to try -- it be a so should doing the put future to that and there's whole that. finger growth continued fantastic. this which just the have we guidance we out. it shake are overall, is some is well across patch, it, going hard

Douglas Howell

this you was maybe quarter to the point still U.K. of be we we digits have flattish, I'm still U.K. at bit. to about said said a very especially things we're we that. we're X% X before. single said We in saying one in so. of its that to X% you the looking December. think or we said what digits. Katie, and New versus out high and Canada update X%. But in we're didn't said the now Zealand, October, in single an then kind we I is said high in in more on closer one down quarter, retail, it little and this And retail head poking that's back it's and what may XX%, October, We Australia opportunity

you have if So -- perspective. out it I just it's pops piece Canadian to at that's know that don't be that might necessarily that causing you

Operator

is Meyer with KBW. of from question the next line Shields The

Meyer Shields

of we're seeing obviously, ton or mentioned, wondering how general terms I that in that involvement in development claims you've Bassett there's any grows don't direct whether And got, there's frequent accurately when adverse more I impact liability. Gallagher of You a more was know, attorney revenues?

J. Gallagher

can helps clearly, there's do participate everything we in clients activity contend we Well, or down But we I when outcome. our to we claim have final you the the analytics to question Gallagher claim, will not I the mean that does us, taking But your in no superior. it We mean, terms advantage of about meaning final And manage believe Basset, we're it. don't actually to comes means mean in severity. and That general see severity, of hire Meyer. up and if your settlements handling we're that that And claimant. than outcomes, be prove data it's market. you the better this. the we

and per definitely you've got helps out frequency. essentially -- if there, So Frequency claim That's -- Bassett. a paid severity creates it's Gallagher some basis. get on that we

of growth with employment. workers' comes compensation economic does driven. Bassett's Gallagher is remember, most As good economic growth more because And a portion revenue our

Douglas Howell

Yes.

are way nurse those one management, think I the that understand the the care where to offering, of managed there of actually can look way clients The at more. opportunities have way can things we all even our do cause -- we to should case we different forces physicians. Bassett Gallagher use

with because deal often. We the understand we them so attorneys also

Gallagher they get billion And $XX can get billion, They're we're that's in. the claims, produces actually to more -- of $XX and the billion, Bassett it customer. paying claims think show I when that. $XX So at more good complicated, value pretty environment

J. Gallagher

That's by and the about $X.XX $X.XX industry. And turns of dollar large, every on to on Coast. seeing remember, course, into that, the function the West claim. premium We're a of

carriers. on have better if that's do level Again, door to so an the And at of pay than going competitors the portion better to out TPAs claims. dollar we in a costs, that you the think you're that impact both that your attention and we goes

Meyer Shields

big I an brokers decelerates know the out big a or very very No, acquisitions. for M&A seen don't because Okay. only up I made for was of Switching acquisition AssuredPartners, for just update other competition not gears, helpful, lot thorough. that have your but tuck-ins? if on multiples the looking that's that of speeds we've

J. Gallagher

all it this, tuck-in of -- you're we're on over multiples much do deals, that we seller. treetop smart we that try pretty been have near at. speculation are activity to years. the buying the to and remember, share of our anywhere is very running think point. have that acquisition, And course, not when levels But every seeing I the we we my our acquisitions do that on AssuredPartners up a the quarter what Well, smaller

buyer. think were there's And we think there. an I I opportunistic definitely a signal

Operator

question Goldman with Sachs. line Rob is next Our of Cox from the

Robert Cox

change that if on think Because asking that? organic need for you to sort the X% growth you I'm within another you thinking about that apologize the give what be the casualty you're question acceleration I may to renewal don't X% when or to assuming us of you're in insight of level the achieve X%. some market X% brokerage wondering if could premium happening you consider into organic, some of And but range,

Douglas Howell

Yes.

current that I there's tailwinds estimate by we the said produced that earlier, think kind casualty or assuming is in that We've Like will be over net about number. about think we of the not the environment fires business had. of X/X half of strengthening. think and We about X/X. seen it be loss new that will contribute that that rate will it we exposure

to up. shine the those get chaotic and the insurance because -- their hard rates rates brighter already to in as big our They're for So to work listening there's customers mean in get said environment are right placed. in business just assumption we're net much to what is not here, well those I they're wins keep in by the chaos are our just we assumption We're it's down in tools rate this really for growth. before, capabilities here, there's in when environments the stung now. pretty that field. and there very new there bit go back big And out big them. unit no what show fact market, exposure is to increases, when for We the showing nor a seeing we trying a rate

things be Now our tools be us go you a or using in should let field. show you your capabilities your us for chaotic, to just insurance our insurance through able capabilities. using aren't prospects to and in level When buy we'll and playing buy

better our business our every day. will offering an is We where new is believe service this getting environment think So and we shine. better

clients the who put into -- be that might bed insights and have get to we get out to renewal what talk let's shaky, make We soon. them and sure a little

this that that is can think the capabilities they that shine where think environment tools and I with our I So folks an have.

J. Gallagher

when as X%, we up killed to, would Doug I the about talking up were have in alluded past, X%.

premium years be ago. X% as rate For growth environment, nirvana XX would that an

is we mitigate So appreciate and what a I our this day that size. like exactly very by us Doug with single our very more just you show is strong clients. a getting capability job about capabilities. for place think it's was But which community, to it's talking buy Remember, you more saying, chance particular, these in don't you market quarterly the more of with listeners the areas this of with remind get buying want and this in more listen greater to it's our for our the and on at type losses every is data, we're attention them which to that it's data a to ability -- I'm competing analytics, to In place from be. us have great a We're and That see to differentiating middle level. I and getting limit sit capabilities. pulling the to away basis. a smaller because talk people clients, to And the or and them clients much -- should our brokers

Robert Cox

now. seem wanted to revenue than lower for years bit it reinsurance only has brokerage, a the our the would but to a ask that be And competitors a of of growth in largest Pivoting outperformance. brokerage you're been X because Gallagher sense. has base, the stronger makes like number I reinsurance your doesn't know That good I just space driver

So you could reinsurance? hoping what's more driving deliver us was in to ability organic what's growth double-digit like been remind I Gallagher's

J. Gallagher

tackling. that think I Well, and it's just blocking

offered part opportunities. up of a no terrific one capital the is capabilities backed being consulting think has analytics, incredible there's additional there management, by doubt some I things in it's Gallagher found and them on team. great we sales of They're that

Douglas Howell

Yes.

The folks Street. what's our team I to on on see wholesalers, and retail with think the program as they firsthand our that our get going in up retailers. They

primary of an that to us, that making structure. their terrific think provide a we're them carriers. just I I And job of the unit integrated better part the not -- helps insights within company think holding a them doing

Operator

Zaremski followup is Our with BMO Markets. a next line question the of Capital from Mike

Michael Zaremski

as My follow-up well, on Great. results. just the is strong reinsurance

Just curious, be on pricing outlook casualty accelerating? mix, reinsurance, the or maybe you greater do a is casualty mix of could that helping on Europe-focused specialty towards kind potentially then, have given

Douglas Howell

Yes.

property but of a the casualty We business. have probably a maybe a business, we're U.S. part is of big North underweighted versus on American terrific little book casualty our others.

it's -- of I is their more I yes, on we're business, understand underweight perception don't think, what casualty but I under weighted. that probably So think book rate exactly that property. our

J. Gallagher

it's Well, no buyer? that's a area talked in got I'd mean casualty. and also good there's is It's calls the these now, really, where if pain some question as about reinsurance -- we've team about really it. at pain, is I the is right that. our That's and

Michael Zaremski

it. one X:XX, sneak I'll since it's Got not one Maybe last in.

versus lot of least there's employers, Just some stats with for building with 'XX. that rise employee for a for any know that. blocks it's organic I to seen, provide employee does to curious, of the inflation But we've 'XX health benefits? Maybe benefits... Or disagree uplift you at expected

J. Gallagher

huge clearly capabilities problem for stop a up as manage doing. our going time it's -- seems never and health And Every consult, -- to and the a And get place it's leader are we we're we welfare. of to one in it employers.

tools all we're have commercial very it good need that. by think And not good kinds frankly. maybe the to market, way, that. you handle much of competition, where in as at the at there's I And And to very, extremely toolbox your that in so we're middle there's

Operator

a final Barclays. Our from Alex question followup with is Scott -- from

Unknown Analyst

Justin Alex. for This is on

middle the Brokerage kind back in commercial segment going market. of Just the into

we to dwindle XX% and think just acquisitions of XX% of when in I was large-scale guys 'XX or ahead... independent time, curious understand are see I that's about And against you wanted like seems this Just it time? whether light you place, just competing the taking ask, of over not to brokers. number sort the of sort been

J. Gallagher

is of bats, competing bats go up communities ] that today, ] [ Well, not and [ number independents not going AssuredPartners bats are ] of at people those at [ smaller in that's XXX% the bats those we're going which at to [ AssuredPartners against ] at when with in same at substantially look only our be you increase take true. are are those going XX% of to a players. of to because our

Douglas Howell

Yes.

XX,XXX fragmented with market are agents think brokers, companies the necessarily of those I and brokerage and those not a license. those

So we're that competing against brokers are there. other the out XX,XXX

absolutely be It we're in in. does there. mean, not that cities accounts are go I after So that those us will AssuredPartners help

is this more than can plus a we it's -- So X, sure. X equal for X think great

J. Gallagher

Thanks, Rob.

again I comment, ready to joining we're wrap I a you and this that have quick just is think for us up thank and afternoon. here,

the creativity, XX,XXX our expertise speaking thank mid-March apart. with focus excellent us As to thank you to and had colleagues A fourth and being with us all financial you this know, a unwavering client out community investment from that year table around set to forward evening. We Day, It's the continue our for finish of your we at huge look great all this now to performance. IR you quarter globe. an goes

Operator

call. conference does This conclude today's

You may now disconnect this your lines at time.

Arthur J. Gallagher & Co. (AJG) 30 Jan 252024 Q4 Earnings call transcript